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Update on the planned EU late payment regulation

Following significant criticism from associations and member states of the planned EU Late Payment Regulation, the EU Committee on Internal Market and Consumer Protection agreed on a more moderate common position at its meeting on 20 March 2024. The corresponding proposal was adopted with 33 votes in favour, 10 against and 2 abstentions. Fortunately, the clear criticism from the member states has had an effect. Particularly noteworthy in the draft report on the planned EU late payment regulation is the stipulation of the general permissibility of up to 60 days payment terms in the B2B sector, subject to prior agreement, and even up to 120 days for seasonal items and products with low turnover, whereby specific product categories are to be stipulated. The committee’s draft report is to be discussed at first reading in the next plenary session of the EU Parliament from 22 to 25 April 2024. The final adoption of the regulation is not due to take place until after the European elections in June 2024 by the newly constituted Parliament.

Background

In September 2023, the EU Commission presented a draft for a new EU Late Payment Regulation. According to the paper, the main motive is to remedy alleged shortcomings in the current version of the Late Payment Directive. The draft regulation on combating late payment in commercial transactions aims to improve the payment discipline of all stakeholders (large companies, SMEs and public authorities) and to strengthen the competitiveness of companies, especially SMEs. This initiative is part of a comprehensive SME relief package to promote and support European SMEs, which account for 99% of all businesses and two thirds of private sector jobs.

Further information can be found in our top topic Planned EU late payment regulation under fierce fire